Bitcoin Price Fell to $6,500 USD, a 6-Month Low Despite Recent Recovery Back Above $7,000
Bitcoin proponents have a lot of expectations from 2019 mainly because of two reasons, one, the crypto market just came out of the longest crypto winter in 2018, and the king coin is scheduled to go under block reward halving in the first quarter of 2020. Many in the decentralized space believed that these two factors would be huge enough to propel the price of Bitcoin to its 2017 high. However, as we near the halving period the price of Bitcoin keeps on declining.
At present time Bitcoin was trading at $6,679.98, making it the 8th day in a row the Bitcoin price has been on the decline. The price of BTC has fallen below the $7,000 mark for the first time since May.
Jeffrey Halley, senior market strategist for the Asia Pacific at Oanda Asia Pacific Pte said,
“Investors can find more joy in traditional markets without aggressive volatility and opaque markets. A sustained rally in Bitcoin would require a complete breakdown in the trade negotiations to happen as financial authorities across the world continue to circle the wagons against digital currencies.”
At the start of the year, there were mainly two kinds of price prediction for BTC, one made by Bitcoin bulls who beloved the two key factors would be huge enough to see a massive bull run, while a few rational analysts beloved BTC would only consolidate its losses of 2018, and might end the year at around $10k mark.
Looking at the current state of price movement the second type of price prediction looks more valid and achievable.
Why Bitcoin Price is on the Decline
The actual reason behind the climb in the price of Bitcoin as well as the decline cannot be pinpointed given the volatile nature. Over the years the sentiment toward the crypto space has changed, wherein early days media coverage was one of the key factors in the price of movement. However, at present, China is being seen as the government behind the climb and fall of Bitcoin price.
When the Chinese President called for accelerated adoption of blockchain technology, Bitcoin price climbed by over 40% in 24 hours the following day. Now that the price of Bitcoin is on the decline for 8 continuous days, people believe China's recent crackdown on cryptocurrency services could be one of the factors.
Last Friday, the People's Bank of China ordered all the crypto centered service providers to correct their mistakes or wrongdoings. The central bank also warned investors to be wary of risks involved with investments in virtual currencies. Apart from that earlier this month, regulatory watchdogs called for a cleanup of service providers offering crypto trading services and illegal exchange services.
Apart from the China factors many analysts beloved the current fall could be possible because of the low crypto trading volumes and better returns from traditional assets.
Vijay Ayyar, Singapore-based head of business development at crypto exchange Luno believed the decline in price is pushing out small and individual miners as the cost of operations is getting way higher than probable returns, causing further decline. He explained,
“We’re seeing what is called miner capitulation and that has indicated previous large drops in the price of Bitcoin. At this time, the cost of production could be indicated to be in the $6,000 range and hence we’ve seen the price dip to that range last week.”